3.2 - Estimating Economical Useful Life
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Practice Questions
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Define economic useful life in your own words.
💡 Hint: Consider both cost and profit.
What does downtime cost refer to?
💡 Hint: Think about repairs or maintenance.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does economic useful life refer to?
💡 Hint: Think about what makes financial sense.
True or False? Downtime costs only include the costs of repairs.
💡 Hint: Consider all aspects of non-operation.
1 more question available
Challenge Problems
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You manage a fleet of construction vehicles. One vehicle costs $200,000 and requires about $40,000 in repairs annually. A newer model costs $300,000, with an expected lifespan of 5 years and maintenance costs of $15,000 annually. Analyze the financial implications and decide whether the older vehicle should be replaced.
💡 Hint: Total costs over the expected lifespan must be compared.
Assess how inflation could influence the decision to purchase a critical piece of equipment, considering current pricing trends and potential future costs.
💡 Hint: Consider long-term investment metrics.
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